How the Bailouts Dumped Risk Onto Taxpayers
December 14, 2009
Here's a nice illustration from the European Central Bank's Jacob Ejsing and Wolfgang Lemkeon of how markets interpreted government rescue packages for banks across Europe: The chart shows how the premia on credit default swaps for governments (i.e., the cost of insurance on government debt) shot up while premia for banks dipped over a tumultuous week in October 2008 when a host of rescue measures were introduced. After the crisis's peak, sovereign CDS were much more responsive than bank CDS to news about the health of financial markets.
Obama's Tough Love
December 11, 2009
The bailout of the auto industry was “throwing bad money after a bad cause,” television talk show host Larry Kudlow warned in National Review. Kudlow’s opinion was shared by conservative economists and politicians. And Tea Party types continue to cite the auto bailout as an example of the Obama administration’s unwarranted largesse toward big business and big labor. But if you compare how the Obama administration handled General Motors and Chrysler with how European leaders dealt with a similar crisis in their industry, Obama’s approach looks tougher and more realistic. That’s at least the ve
‘There Is No Simple Formula Here’
December 11, 2009
President Obama gave a pretty good speech when he accepted the Nobel Peace Prize. Maybe it was a little too eloquent. I don’t much like soaring rhetoric; I know there are times to soar, but Obama does it, or tries to do it, every time. Plain speech is also useful, and there was some plain speech in Norway—particularly the reiterated insistence, directed, I think, to our European friends, that sometimes making war is the only way to a just peace.
How to Save Detroit
December 09, 2009
For much of the United States, Detroit has become shorthand for failure--not just because of the dilapidation of the town’s iconic industry, but because the entire metropolis seems like a dystopian disaster.
It’s Always Snowing on the Drudge Report
December 09, 2009
Is a “record cold” in Idaho threatening your potato crops? Never fear, Matt Drudge will post a link. Snowing in Houston? Drudge has the scoop! Blizzard delaying your flight out of JFK? You get the picture. Drudge’s climate denialism is well known, but his tendency to cite Accuweather.com is, well, odd. Here’s a look at part of yesterday’s homepage: Drudge links to weather reports a lot, and seemingly more in the fall and spring, when it should be cold outside but not that cold.
Will Iranian Sanctions Work?
December 08, 2009
With no signs of cooperation from Tehran and Obama's year-end deadline approaching, the administration is pushing for new sanctions against Iran starting in January. For a better understanding of the sanctions situation, check out these recent TNR pieces: In "Over a Barrel," David Makovsky and Ed Morse argue that the current sanctions being considered are unlikely to have much effect: The only effective option for seriously limiting its gasoline imports is to impose a naval blockade on Iranian ports, which should only be undertaken, if needed, after proper and complete preparation.
December 07, 2009
Trotsky Robert Service Harvard University Press, $35 When Leon Trotsky was assassinated in Mexico City by an agent of Stalin, in 1940, the American novelist James T. Farrell took to the pages of Partisan Review to memorialize him. “The life of Leon Trotsky is one of the great tragic dramas of modern history,” Farrell’s obituary began, and it only gets more idolatrous from there. “Pitting his brain and will against the despotic rulers of a great empire, fully conscious of the power, the resources, the cunning and cruelty of his enemy, Trotsky had one weapon at his command--his ideas.
December 05, 2009
A Fiery Peace in a Cold War: Bernard Schriever and the Ultimate Weapon By Neil Sheehan (Random House, 534 pp., $35) In late March 1953, a colonel named Bernard Schriever sat in a briefing room at Maxwell Air Force Base in Alabama, listening as John von Neumann, the brilliant mathematician, and Edward Teller, the physicist, discussed the future of the hydrogen bomb, the far more powerful follow-on to the atomic bombs dropped on Hiroshima and Nagasaki eight years earlier.
Score One for Lady Ashton
December 04, 2009
She is newly elected foreign minister of the European Union, made up of 27 sovereign states with half a billion people. OK, she has no substantial foreign policy experience. Except that she was a young militant in Bertrand Russell's not very sane Campaign for Nuclear Disarmament, what was called CND, the symbol of which looked a bit like the Mercedes Benz logo. Yes, CND probably received some of its cash from the Russians. But which “peace movement” did not?
Three Ways The Copenhagen Talks Could Succeed (Or Go Bust)
December 03, 2009
Given that there's virtually no chance a finished climate treaty will come out of the upcoming talks in Copenhagen, one might be forgiven for asking what, exactly, the world's diplomats are actually going to do these next two weeks in Denmark. Already, further talks are scheduled for next year—including yet another big climate summit in Mexico City in 2010.